Legal Memorandum: Creditor's Remedies in a Divorce Proceedings

Issue: What remedies are available to a creditor under the Uniform Fraudulent Transfers Act (UFTA) in North Dakota in a divorce proceeding?

A creditor’s remedies are set forth in N.D. Cent. Code § 13-02.1-07(1) (UFTA § 7).  The remedies include, (1) “avoidance of the transfer . . . to the extent necessary to satisfy the creditor’s claim”; (2) “attachment or other provisional remedy against the asset transferred or other property of the transferee” as set forth in N.D. Cent. Code § 32-08.1; and (3) “an injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property, an appointment of a receiver to take charge of the asset transferred or of other property of the transferee, or any other relief the circumstances may require.”  Id.  If the claim against the debtor has been reduced to a judgment, the court entering judgment may order that the transferred asset be subject to levy and execution.  Id. § 13-02.1-07(2).  See Schriock v. Schriock, 128 N.W.2d 852 (N.D. 1964) (husband transferred corporate property to second wife to avoid payments to first wife required by divorce judgment)

Note also that the UFTA is based on principles of equity.  See Ciccarelli v. Guaranty Bank, 99 P.3d 85 (Colo. Ct. App. 2004) (noting that equity looks to substance of transaction rather than form).  As a result, an action under the statute is substantially different than a common-law cause of action for fraud, such that the precise pleading requirements for fraud set forth in the rules of civil procedure do not apply.  See Carter-Jones Lumber Co. v. Denune, 725 N.E.2d 330 (Ohio Ct. […]